The Role of International Trade in Business Cycles Correlations among Economic Cooperation Organization (ECO) Members

Document Type : Research Paper


1 Ph.D.

2 M.A. Student


Recently, the study of international business cycles and their transfer among countries has been a controversial issue in the literature of regional cooperation. Moreover trade in goods and services are considered as the most routine and rather vaguest channel for transferring economic fluctuations. Since ECO is one of the main trade cooperation organization in the Middle East, in this paper the attempt was made to study the role of international trade in business cycle correlation among ECO members (excluding Afghanistan) during 1993-2006. The OLS method was applied to test the hypothesis.
The results indicate that the international trade had major role in business cycles correlation among ECO members during the period. In addition, two dummy variables of the model, i.e. common border and language had significant role in   business cycles correlation.


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